Time to declare offshore assets?
HMRC has published a press release to remind taxpayers that the 30 September 2018 deadline to come forward and declare any foreign income or profits on offshore assets is fast approaching. This is the date set out in the Requirement to Correct (RTC) legislation that was introduced by the Finance (No.2) Act 2017.
Taxpayers making a disclosure will then have a further 90 days to make the full disclosure and pay any tax owed. The RTC legislation applies to any person with undeclared UK Income Tax, Capital Gains Tax and/or Inheritance Tax liability concerning offshore matters or transfers. The RTC relates to offshore tax non-compliance committed before 6 April 2017.
According to HMRC, the most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. Once the deadline has expired, any new disclosure will be subject to the new failure to correct (FTC) penalties, which are more punitive than the existing RTC penalties. Also, this may include taxpayers being publicly named and shamed by HMRC. The FTC standard penalty will start at 200% of any tax liability not disclosed under the RTC and cannot be reduced to less than 100% even with mitigation.
Information that is required to be provided to HMRC under the RTC rules must be provided to HMRC by 30 September 2018. This date coincides with the date more than 100 countries will exchange data on financial accounts under the Common Reporting Standard (CRS). This data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.
Any taxpayers that are unsure as to whether or not they need to make a disclosure are strongly encouraged to check their tax position. The RTC rules are complex and we can help review any historic issues and advise and assist with making any necessary disclosures to HMRC.